Good Shepherd Microfinance welcomes the opportunity to contribute to the development of the Financial Wellbeing and Capability (FWC) activities, as set out in the discussion paper.

The activities undertaken within the FWC are core to the work of Good Shepherd Microfinance, including the provision of microfinance services and the Financial Inclusion Action Plan (FIAP) program. There are also important services delivered alongside our microfinance programs by partners in our national NILS network of community organisations. Our response incorporates feedback from a number of community organisations who deliver NILS together with other FWC services.

We support the objective of increasing the capacity and capability of the FWC sector, and to improve outcomes for vulnerable people in Australia. This includes many of the areas identified within the discussion paper – targeting those most in need, collaborating more effectively, enhancing impact, increasing professional development opportunities, and working from a solid evidence-base. These are sensible and worthy objectives.

Yet, we are concerned that the proposed approach is inflexible and will exclude people who need help and are proactively seeking it, particularly people who are in low-paid and insecure work, often referred to as the ‘working poor’. The policies set out in the discussion paper suggest that the services will be accessible in a way that means clients must reach a crisis point to unlock more intensive services. The policies separate the roles of crisis assistance and early intervention, effectively reducing the ability of practitioners to provide holistic services. While this approach may appeal in theory, in practice it will diminish the opportunity for early intervention and prevention. Our community network is concerned that they will be obliged to turn away people that seek help, and missed opportunities to provide early intervention and prevention support will likely lead to higher levels of crisis in the future, which will place increased stress on social services.

Good Shepherd Microfinance would also like the Australian Government to review the financial wellbeing continuum that is depicted within the discussion paper, specifically the importance that is attributed to employment as a primary indicator of financial wellbeing. Our experience, and that of our community network, suggests that while there are an important section of clients that can be employed, the reality is that many people seeking FWC assistance are unable to work due to chronic illness, disability, lack of employment opportunities and ageing. Therefore, while improving the support for people who are on the pathway to employment is vital, focusing resources on employment for those who cannot work is not productive.

We would also like to mention that there have been many changes to the FWC and social services sector in recent years, including substantial cuts in funding. This means that many people working in community organisations within our network are working harder and longer, often for less or no money. Meanwhile, frontline workers are working with clients with more complex circumstances and the level of need for financial assistance continues to increase in Australia – 14,000 calls to the National Debt Helpline were unable to be answered in January 2017.

Good Shepherd Microfinance calls on the Australian Government to urgently enact the changes to the Small Amount Credit Contract laws as proposed in the recent independent review. This will have an immediate and large impact on the financial wellbeing of the most vulnerable people in Australia.

Finally, we are pleased that the Department of Social Services remains committed to an ongoing investment of $100m in FWC services, including the ongoing investment to deliver microfinance services across Australia.

Read our full submission on the Department of Social Services Financial Wellbeing and Capability Activity Discussion Paper.

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Good Shepherd Microfinance acknowledges Aboriginal and Torres Strait Islander people as the traditional owners of the lands on which we operate and work, and pays respects to their history, their living culture and to Elders past and present.